In 1986, Carvey became a household name when he joined the cast of NBC's Saturday Night Live. He, along with newcomers Phil Hartman, Kevin Nealon, Jan Hooks, and Victoria Jackson, helped to reverse the show's declining popularity and made SNL "must-see" TV once again. An important part of the show's revival was Carvey's breakout character, The Church Lady, the uptight, smug, and pious host of Church Chat.[11] Carvey said he based the character on women he knew from church while growing up, who would keep track of other churchgoers' attendance. He became so associated with the character that later cast members such as Chris Farley referred to Carvey simply as "The Lady".[12]

Carvey's other original characters included Garth Algar (from Wayne's World), who was based on his brother,[13] Hans (from "Hans and Franz"), and The Grumpy Old Man (from Weekend Update appearances). Throughout the election and presidency of George H. W. Bush, he was the designated impersonator of the president, making him the lead actor of the regular political sketches on SNL.

During the 1992 US presidential election campaign, Carvey also did an impression of independent candidate Ross Perot; in a prime-time special before the election, Carvey played both George H. W. Bush and Perot in a three-way debate with Bill Clinton, played by Phil Hartman. As Perot—prerecorded and timed to give the appearance of interacting with the live Bush and Clinton—Carvey eschewed the show's signature "Live from New York" opening line, telling Bush "Why don't you do it, live-boy?" Carvey left SNL in 1993.

Carvey's SNL work won him an Emmy Award in 1993 for Outstanding Individual Performance in a Variety or Music Program. He has a total of six Emmy[14] nominations. Carvey has returned to host SNL four times, in 1994, 1996, 2000, and 2011.

One of his first acts was the famous "chopping broccoli" which has become one of his fanbases favorites.

In 1994, Carvey starred in the film Clean Slate. The following year, Carvey filmed his first HBO stand-up special Critic's Choice. The show featured Carvey doing many of his SNL impersonations, as well as making fun of the premium channel's name, pronouncing it "hobo".

He had to turn down a role in Bad Boys because he felt overwhelmed as a new father.[13]

In 2002, he returned to films in the spy comedy The Master of Disguise. Released a week after former colleague Mike Myers' successful (and similar) film Austin Powers in Goldmember, most critics compared the movies and panned Carvey's effort. However, the movie did manage about $40 million at the North American box office. In March 2007, aggregate review website Rotten Tomatoes ranked the film as the 18th worst-reviewed movie of the 2000s decade, with a 1% fresh rating.[15] Comedian and former Mystery Science Theater 3000 host Michael J. Nelson named the film the third-worst comedy ever made.[16] Carvey did not appear in a film again until 2011's Jack and Jill. It, too, is considered one of the worst comedies of all time. He had previously appeared in another Adam Sandler film, Little Nicky.[17][18]

Carvey eventually withdrew from the limelight to focus on his family. He later said in an interview that he does not want to be in a career in which his kids would already be grown with him having neglected spending time with them, a major reason for his declining the hosting spot for Late Night that ultimately went to Conan O'Brien. Carvey has said that he generally prefers stand-up comedy to acting in movies and regularly performs lucrative corporate dates, boasting of "a few million-dollar months" during a 2016 Howard Stern interview.[20][21]

At the January 2, 2007, funeral of Gerald Ford, George H. W. Bush reminisced in his eulogy about how Ford took it in stride when SNL's Chevy Chase made Ford the object of impressions. Bush cited this as a valuable lesson in learning to laugh at one's self as a part of public life. "I'd tell you more about that," Bush continued, "but as Dana Carvey would say, [imitating Carvey imitating him] 'Not gonna do it! Wouldn't be prudent!'"

Carvey made an appearance at the 2008 MTV Movie Awards, reprising his SNL character Garth Algar with host Mike Myers for a "Wayne's World" sketch. On June 14, 2008, Carvey filmed a second HBO stand-up special, the first in 13 years, entitled Squatting Monkeys Tell No Lies.

In 2010, Carvey appeared in the Funny or Die original comedy sketch Presidential Reunion. He played the role of President George H. W. Bush alongside other current and former SNL president impersonators.

In early 2010, Carvey and comedian/writer Spike Feresten created and starred together in Spoof, a sketch comedy pilot for Fox. This included a sketch of a trailer for "Darwin", a mock film in which he played the evolutionary biologist, as well as a spoof of the hit TV series Lost. Both of these sketches can be seen on YouTube.[22][23] On the animated TV series The Fairly OddParents, Carvey voiced Cosmo Cosma's con artist brother Schnozmo.

On April 29 and 30 of 2016 Dana Carvey recorded two live performances at the Wilbur Theatre in Boston, Massachusetts for a Netflix special to be released later in the year. Trying their own hands at stand-up comedy, Dana's two sons Tom and Dex opened the show for him.

In 1979, while performing at The Other Cafe in San Francisco, Carvey met Paula Zwagerman. They became engaged in 1980 and married in 1983. The couple have two children, Dex and Thomas Carvey.[24]

In 1997, Carvey underwent heart bypass surgery for a blocked coronary artery, but the surgeon operated on the wrong artery. The blocked artery was deeply buried in muscle and thus hard to find; another artery, though not blocked, was clearly accessible, so the surgeon bypassed it. Carvey, later suffering from angina pectoris, sued for medical malpractice and was awarded $8 million in damages. He donated the money to charity.[25][26] He has had to undergo additional surgery to correct his heart problems. He told Newsday that, while he was in the hospital for his final angioplasty, Frank Sinatra died in the room adjacent to his.[13]